The three new farm laws of the central government have taken the entire country by storm. Thousands of peasants and also some rich farmers are demonstrating, just outside Delhi from end of November. They are demanding the complete repeal of all the three laws and also legal guarantee for minimum support price. The government claims that they have made these laws for the benefit of the farmers.[see note at the end of the article], especially “poor and marginal farmers” If so, why are the peasants agitating? The government says – brokers, commission agents and conspiracies of the opposition parties have misled the peasants into the movement. Are they infants that they could be easily misled by the others? Why cannot the government explain the correct thing to the poorer sections of peasantry? The BJP and the government have so much power – Modi's popularity across the country is at its peak. So why would the peasants listen to the opposition parties instead of listening to them? More importantly, if the peasants are protesting due to the instigation of the opposition parties, then why are they not allowing the opposition parties to occupy the podium of their movement?
The reality is completely different. These farm laws will cause immense damage to the lives of peasants. Realizing that, the peasants started the fight with the slogan of 'Fight or die´ (Larenge ya marenge). The workers and agricultural laborers also need to understand that these new farm laws of the Modi government will not only harm the poor prasants, but also the workers-agricultural labourers and the entire spectrum of toiling masses. How? Let's understand that.
The government has a purpose behind these three laws. The government wants to hand over the crops, the agricultural products, the agricultural land – in a nutshell the entire agricultural sector to national and foreign corporates. Inroads intothe agricultural sector by national and foreign corporates hadbegun before. These three new farm laws of the Modi government are designed toenhance this process many many times.
You may be wondering -- if the domestic or foreign corporates or the big companies do business what harm can they cause to the peasants? And how will it affect the workers and toiling people like you or me?
In fact, if the big domestic and foreign companies establish their control over the agricultural sector, some rich peasants or big farmers might get a share of their profits, and even some peasants lower than them might also benefit a bit, but,
· Millions of poor peasants will not be benefitted. Rather, they will either have to gradually leave or be evicted from their land. And given the situation of employment in the city or village, they will not get any alternative job, and will be pauperised.
· Presently, the landless laborers are not getting enough work, their situation will further worsen.
· The more the Indian and foreign corporates will be able to monopolize agricultural production, the higher will be the price of crops. The working people and toiling masses will have to spend most of their earnings to buy food. Due to escalating prices of food grains the sufferings of the poor and toiling masses will increase.
This is not our imagination. Let us see how these new Acts will drive us in this direction.
The first act - the new Farmer´s Produce Trade and Commerce act
One of the new farm acts of the Modi government is the FARMERS’ PRODUCE TRADE AND COMMERCE (PROMOTION AND FACILITATION) ACT, 2020 - in simple terms an act regarding buying and selling of agricultural produce. As a result of this law, the domestic and foreign companies will gain control over the crops produced by the toil of the farmers. And based on this control they will reap humongous profit. Why? When the government is repeatedly claiming that this law will benefit the farmers, and they will get higher prices for their crop?
1. The new aspect of the new agricultural trade and commerce law is to allow the buying and selling of crops in other places besides government mandis (markets). The government or the BJP says - ‘Why is this problem for the farmers? The farmers will find many more buyers for their crops. They will be able to sell crops at the farmgate. So, rather than being any problem to the farmers, these acts will benefit them.´
Are these logics correct? First of all, the act states that traders will not have to pay any tax to the state government for buying crops outside the government mandis – a tax that they need to pay to the state government when they buy crops from the government mandis. If one can do business without taxes, then who would bother to do so by paying taxes? Naturally, as a result, traders will not go to the government markets and consequently the government mandis will dry up. The added benefit of the corporate companies is that they will save billions of rupees as they will not have to pay taxes for buying crops.
2. Why will the corporates or other businessmen benefit if the government mandis cease to exist? Crops cannot be purchased in government markets below the price fixed by the government i.e.,the MSP. If the corporates buy outside the government market, they will be able to buy crops from peasants at a much lower price than the MSP. Despite the announcement of an MSP, peasants often have to sell their crops below MSP. Needless to say, big companies will buy crops from peasants at much lower prices if there is no obligation to buy in MSP. The absence of government mandis will give yet another advantage to corporate companies. Presently, when different companies buy crops from peasants, they pay the peasants based on what is going on in the government mandis. If there is no government mandi, this system will not exist. So, how will the peasants get higher prices for crops?
3. Modiji said, “The new act will give freedom to the farmers. They will sell where the price of the crop is higher. This act will be historic for the farmers. "
The first question here is -- do the poor peasants have the freedom to sell crops wherever they wish? They are almost always tied to the money lenders, middlemen and local traders by their loans. They can hardly get out of these bondages and reach the government market. As long as they are not freed from the clutches of traders, local money-lenders and the middlemen, they will never get the freedom to sell the crop to whomever they want.
Will the poor and middle peasants (who would be able to sell their crops to these big companies) get higher prices? We need to understand one thing clearly - they do not decide the price of their crops, the price is decided by the traders. This is because the power or strength of these peasants is insignificant compared to the strength of the traders and businessmen. The big farmers may to some extent decide the price of their crops, but not the middle or poor peasants. For example, do we fix the price of the goods sold by the big companies in departmental stores? No, we have to pay the price written on the goods. The big companies do not value the opinion of individuals. Similarly, the peasants or even farmers are obliged to sell their produce at the price dictated by the traders . Especially poor and middle peasants, because the businessmen and traders are powerful, while the ability and strength of individual peasant is very limited. Consequently, they are forced to sell their crops at a marginal profit, and sometimes even at a loss, because they do not have the ability to hold back or store the crop. If the traders who have done business for so long are the ´big fish´, then Ambani-Adani-Tata-Birla etc. are the shark and whales. Very large or wealthy farmers may be able to bargain a bit with these monopolies, but how will the poor or middle peasants compete? Isn't it ridiculous to think that some poor peasant of a remote village having merely ten or twenty sacks of grains will bargain with Ambani or Adani, the owner of lakhs of crores of rupees?
And, why will these big companies pay the peasants more? Are they doing business for the benefit of the peasants, or for their own profit? They want to buy from the peasants at the lowest possible price. So, isn't it ridiculous to think that the peasants will get higher prices if these corporates enter the crop business?
4. The big corporate companies will not only buy crops and grains from the rich peasants or the big farmers, they will also try to grab them from the relatively smaller peasants. The government has taken the step to create Farmer Producer Organisations or FPOs so that poor farmers can follow the dictates of these corporates. Of course, the big corporate companies cannot afford to buy small amounts of crops from individual small farmers – this is a cumbersome process for the companies. Why will they take this trouble? That is why the government is setting up some farmers' cooperatives called the FPOs or Farm Producers´ Organizations. Their job will be to collect the crops of small farmers and sell them to big companies. These FPOs have been set up in different states and have started functioning. This may benefit some of the small farmers at some point, but the real purpose of doing these FPOs is to help the big companies. They will occupy important positions in these FPOs and wield their power.
So, all in all, what did the Central Government try to do with the new Farmers’ Produce Trade and Commerce Act? They have made all the arrangements so that the big corporate companies can easily buy crops and grains from the peasants at a price of their choice. They do not have to pay any tax to the governments. There is no obligation to buy at the minimum support price fixed by the Central Government. Once they gain complete control over the farmer's produce, they will fix the price of the crops and grains and the farmers will be forced to sell at that price.
Another important aspect is that state governments’ control over inter-state agricultural trade and commerce has been abolished so that the big corporates can do trade in agricultural crops across the country without any hassle. In other words, the role of the state governments has been reduced to nothing so far agricultural marketing is concerned.
Do we still need to believe that this new Act of the Modi government is for the betterment of the farmers? No, this Act is not for the good of the farmers. This law has been enacted so that the large domestic and foreign companies can make humungous profit by establishing complete control over the crops and grains of the farmers.
[It is pertinent to mention here that the government has retreated under the pressure of the farmers' movement and assured that they would continue to buy the crops from the farmers at a minimum support price. Also, the state government will be allowed to levy tax (if they wish) on the crops and grains that will be bought and sold outside the government market. Naturally, the farmers did not accept the government's proposal. This assurance from the government does not make any sense. We have past experience of commitments of the governments. Even if the government assures today, it does not mean that it will adhere to this assurance later. And, although the government has promised to impose a tax on trade outside Mandi, in reality most of the state governments will not impose such a tax as the BJP is in power in most states. We need to understand one thing -- governments have been saying for a long time that it wants to wash off its hands from buying crops and grains from the farmers in MSP. There are two reasons behind this. The number one reason is that the government is spending a lot of money to buy crops and grains in MSP. And the second reason is, if MSP is maintained, the market price of crops will not be under the control of big companies. That is why prices of crops in an open market and MSP - these two things cannot go together.]
Second Act – contract farming
Another law of the new farm laws is the contract farming Act. What does contract farming mean? Cultivation on the basis of a contract or agreement between the farmer and a company. The agreement will decide the type and amount of crop or grain, as well as the quality, the farmer has to give to the company. On the other hand, the company will assure in the contract what price of the crop they will pay after the harvest. The Government claims that as a result, the peasant will get the price guaranteed in advance, s/he will not have to worry about the market fluctuations.
Contract farming is not a new thing, it started in this country about twenty years ago. Peasants have some bitter experiences with contract farming. That is why it is not possible to rely on the assurances and sweet talk of the government. What if the company is not satisfied with the crops or grains after cultivation? It so happened that Pepsi Co did not buy potatoes meant for potato chips as per the contract made before, since they did not find the quality to be satisfactory. If the company does not buy the crop, will the farmers throw away their produce as garbage? In Gujarat a company filed a case demanding millions of rupees compensation since the farmers sold the crop to other people. What will the farmers do if the company does not pay the price guaranteed in the contract? This has happened in the case of contract farming of basmati rice in Punjab. Instead of protecting the farmer from all these oppressions, the new law has taken away the right to go to court against the company.
However, these are secondary issues. What does the government want to achieve through contract farming? Since a long time, the governments or the ruling class have been trying to persuade the farmers to cultivate cash crops. According to them, the farmers will supposedly earn more if they do so. As a result of cash crop farming, a section of the farmers, particularly the rich peasants have been able to garner some profit. But, in general, the farmers are in a very precarious situation. On the one hand, the cost involved in this type of cultivation is very high. On the other hand, the price of the crop fluctuates in the market in such a way that if there is a profit in one year, there will be a huge loss in the next year. As a result, many farmers are committing suicide due to debt. Since they are not cultivating food grains, it is also not possible for the farmers to sustain and feed their family from what they cultivate. Farmers are going through such a situation. That is why farmers are repeatedly demanding the government to increase the MSP so that they get a profitable price. Instead, the government is handing over the farming work to the corporate companies.
Through contract farming the companies will try to increase this type of farming because the companies want cash crops. The companies will provide the capital or technology needed to cultivate these crops. This will increase the farmers’ dependence on the company. In the end, the farmers will become completely dependent on the companies. The big companies will also make contracts with small farmers. However, the companies will not establish contracts with individual persons. The FPOs will assume this responsibility. They will organize the farmers and take them to the company. This is how things will commence. Who can say that someday the companies will not also grab the lands of the farmers?
This means, the first law i.e., the trade and commerce law will enable the big domestic and foreign monopolies to monopolize their control over the crops and grains produced by the toil of the farmers and through contract farming and other means they will establish their monopoly over land and agriculture. In summary, they will be able to establish their control over the entire agricultural sector. This is the real purpose of these two laws.
The third Act – amendment of Essential Commodities Act
The biggest proof that the government has enacted these Acts to serve the interests of traders and domestic and foreign companies and not the interests of peasants, is the amendment of the Essential Commodities Act. The Essential Commodities Act was enacted to stop stock piling and profiteering-speculation. The Act stipulates the traders from buying and stockpiling crops from the peasants by setting an upper limit of allowed stocks so that they cannot speculate. The government could also control the supply of food grains in the market so that traders could not stockpile and sell at inflated prices due to shortage of crops and grains in the market. In this way the government also tries to control the price of food grains. In reality, this Act did not make much of a difference for big business. We know very well how they sometimes inflated the price of onions and sometimes the price of potatoes. What did the Modi government do by amending the Essential Commodities Act? Lifted the limit for stockpiling of food grains, lifted the limit on the price at which the traders would sell the crops. Is this done for the benefit of the peasants? How many more lies will the government tell?
Anyone understands that this was done by the government to serve the interests of big Indian and foreign capitalists who will do trade and commerce with the crops produced by the farmers. They can buy the crops from the farmers at a minimal price during harvest and stockpile it the way they wish. Contract farming has been kept completely outside the purview of the Essential Commodities Act. Clearly the companies involved in contract farming stand to benefit from this amendment. It will also benefit big businessmen. We the workers, landless labourers and poor toiling masses who have to buy and eat everything will suffer. Even the poor peasants have to buy crops. How will we be able to negotiate with the food inflation? Is it not now clear that who the government is trying to serve and who is being robbed?
Will MSP solve all the problems?
A section of the peasants, especially the rich peasants, and also the big farmers want the government bring a legislation to guarantee that the Government will fix the MSP for all crops and purchase of crops under MSP will be a punishable offence. The question is, even if such a legislation is enacted, will that solve the problems of the peasants, especially the poor peasants?
Those who have some idea about the condition of agriculture in India know very well the rate at which the cost of seeds, fertilizers, pesticides, etc. have increased in the last few decades. The cost involved in farming has increased due to the policy of liberalization that was adopted to serve the interests of big domestic and foreign capitalists. Not only the BJP government but all the previous governments formed by different bourgeois parties are responsible for this situation. The big companies of seeds, fertilizers and pesticides are forcing the farmers to buy goods at prices fixed by them. Although the cost of cultivation has increased, the prices of the grains and crops have not increased commensurately. As a result, most of the time there is no profit in farming, rather there is a loss. That is why the farmers frequently demand a hike in the government determined MSP.
However, when the MSP increases, it adversely affects the workers, agricultural labourers, poor peasants and other toiling people who are not connected with agriculture, who buy their food grains and crops. When MSP increases, it pushes the price of food items and they have to buy them at higher prices. How will they provide for this. Their real income is not increasing ? Secondly, do all the farmers benefit similarly due to increase in MSP? Only a handful of rich farmers mainly reap the maximum benefit from MSP.
However, the reason why the government wants to abolish MSP regime is different. The government cannot stop simply by announcing the MSP, they also have to buy crops at the MSP. Hence, if MSP is increased, more money needs to be spent from the government's exchequer. However, the government exchequer has dried up following generous assignment of funds in favor of the big capitalists. Hence, the government is trying to wash its hand off by handing over the entire agricultural market to the big capitalist companies.
What do we understand from the above? First, the fertilizer and seed companies were benefited through liberalization. The use of machinery in agriculture was increased to increase production. As a result, sales of tractor and harvester companies increased, their profits surged. Now, these three new laws have been enacted to allow big capitalists to capture agricultural trade and commerce and agricultural production. The worst affected will be the poor peasants and agricultural labourers. The industrial workers will also suffer. That is why the policy of handing over agriculture to these big corporates needs to be challenged. These three Acts should be repealed.
The actual demand of the rich farmers is to maintain the old practice of MSP and government Mandis. If there is an MSP and if the government buys crops according to MSP from the Mandis, their profits will remain unhampered. But, the demand in the interests of the working class, farm laborers, poor and middle peasants is to repeal these three laws completely. The demand of MSP goes against their interests. The working class, the agricultural labourers and the poor peasants cannot support MSP.
Finally, where do we stand?
The purpose of these three laws is to hand over India's agriculture more and more to the big domestic and foreign capitalists. They will grab farmers´ crops and reap profit by doing business with them. They will force the farmers to cultivate crops according to their choice - practically turning the farmers into their employees. As a result of all this, different crops will be produced, production will increase, and rich farmers along with a handful of other farmers will benefit and move up the ladder of success. But, millions of poor farmers will be evicted from their land. Even now there are very few jobs for the agricultural labourers. Once these Acts are enforced, their employment opportunities will diminish farther. And if the evicted poor peasants join the group of landless labourers, their condition will further deteriorate. They will have to move toward the cities in search of low-paid jobs as contract workers in some factory, run by some capitalist. Albeit the fact that even such jobs are not easily found in the present times. On top of that, food prices will rise, making workers and poor toiling masses more vulnerable. Why is the government doing all this? They are doing it for the profit of big Indian and foreign companies. In a nutshell, the bulldozer of development of the big capitalists will advance by crushing millions of poor people. This path did not begin today. For the last two or three decades, the rulers have been changing the agricultural sector of the country in this manner. These laws will accelerate that process of change.
It may be noted that the Modi government was so desperate to hand over the agriculture sector to the big domestic and foreign companies that they completely ignored the rules and regulations while enacting these Acts. The most significant thing is that the centre does not have the right to make any legislation on agricultural system, the state government has this right. Over the last 20 years, different state governments have made various changes in agricultural marketing or contract farming. But, even though the big capitalists were doing business, they were not able to exploit the full potential of the agricultural market. So, this time the Modi government used their majority to change the laws of all the states in one stroke. If they succeed in this venture, then it can be said that the central government will unleash bigger attacks on the toiling people of the country in similar fashion.
The path of the ruling class versus the path of the working class
This is how the ruling class wants to develop agriculture. This may cause some development of agriculture, but it will destroy millions of middle and poor peasants, landless laborers and working people, including industrial workers. Is there no other way to develop agriculture? Of course, there is. If the peasants organise themselves in a co-operative and organize large scale cultivation on land of all peasants together, then they will be able to produce much more. Consequently, everyone would have received much more. But, before that they have to abolish the old landlords, who do nothing in agricultural production, but grab lion’s share of the agricultural production in the form of rent. Along with the landlords, all those usurious moneylenders who exploit the farmers, also must be abolished. Domestic and foreign monopolies that are exploiting the workers and peasants and other toiling people must also be removed. If the workers and peasants can assume power by removing all of them, only then the peasants will be able to organize cultivation in this manner. Under this situation, big companies will not be able to grab the produce from farmers, nor will the traders and middlemen be able to do so. In this way agriculture will advance by developing the farmers, not by destroying them.
That is why it will not be enough to resist Modi government's new laws. The laws must be resisted in order to advance in a new direction - the path of liberation from all exploitation –this is the path of the working class.
Note :
Amidst the enactment of three agriculture related acts and the vehement opposition that has been evoked, the government and many others presenting their articles or opinions have referred to the farming community as “farmers”. But in accordance with Marxist analysis we make a distinction. For us farmer and peasant are distinctly different categories. The farmers are those who are involved in organizing the agriculture production along capitalist lines without themselves taking part in production. While, on the other hand, the peasants or peasantry, in spite of existence of different strata among them, are those who themselves take part in agricultural production. Hence accordingly in the present article we have tried to maintain that distinction between farmers and peasants, without disturbing the government’s declarations. It must be kept in mind that in government’s literature or pronouncements they club all categories of participants in agricultural production as farmers.
Secondly, determination of class differentiation among the peasantry must be done on a scientific basis. The bourgeois economists in general, and the Government organizations in particular, differentiates the peasantry according to amount of land –ownership. According to the method followed by the Government of India and its organizations the peasants are categorized in four groups – marginal, small, medium and large farmers. However, the class differentiation can be understood by the ownership of means of production and also whether peasant sells or employs labour power. Accordingly, the Marxists generally recognize four classes among the people who work in agriculture. Agricultural labourers sells labour power and generally do not own land or any substantial means of production. Poor peasants may own land and some means of production, but also has to sell labour power to make a living. Middle peasants own land and means of production and derive income wholly or mainly from the labour of their family. The rich peasants own/rent land and substantial amount of their income comes from the exploitation of labour power. All these classes are give labour in agricultural work and so except the agricultural labourer, all are different sections peasantry. The agricultural labourers can also be termed as rural proletariat, as like industrial proletariat they do not own means of production and has to sell labour power to make a living. Besides these classes, there are farmers as we have stated before. In the whole article we followed the classification stated above.
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